Section 225: Expenses of investigation
This section is for determining who pays the expenses of a government-ordered investigation into a company.
The section, clause by clause
What the section says
In plain terms
(1)The expenses of, and incidental to, an investigation by an inspector appointed by the Central Government under this Chapter other than expenses of inspection under section 214 shall be defrayed in the first instance by the Central Government, but shall be reimbursed by the following persons to the extent mentioned below, namely:—
The Central Government will initially pay the expenses of an investigation, but will be reimbursed by individuals convicted or ordered to pay damages, companies that recover sums or property, and other entities as specified, to the extent of 100% of the expenses as ordered by the court or directed by the Central Government.
(1)(a)any person who is convicted on a prosecution instituted, or who is ordered to pay damages or restore any property in proceedings brought, under section 224, to the extent that he may in the same proceedings be ordered to pay the said expenses as may be specified by the court convicting such person, or ordering him to pay such damages or restore such property, as the case may be;
(1)(b)any company or body corporate in whose name proceedings are brought as aforesaid, to the extent of the amount or value of any sums or property recovered by it as a result of such proceedings;
(1)(c)unless, as a result of the investigation, a prosecution is instituted under section 224,—
(1)(c)(i)any company, body corporate, managing director or manager dealt with by the report of the inspector; and
(1)(c)(ii)the applicants for the investigation, where the inspector was appointed under section 213, to such extent as the Central Government may direct.
(2)Any amount for which a company or body corporate is liable under clause (b) of sub-section (1) shall be a first charge on the sums or property mentioned in that clause.
Any amount a company is liable for under this rule will be a first charge on the sums or property they recovered as a result of the investigation.
The right-hand column is written from the section text, not quoted from it, and it has no legal force. Where the two differ, the left-hand column is the law.
Amendment notes
- 1. Ins. by Act 31 of 2016, s. 255 and the Eleventh Schedule (w.e.f. 15-11-2016).
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Reproduced from the official India Code print for reference. Check the current text on India Code before you rely on it, and read the section alongside its Rules. Nothing here is legal advice.